Rosetta Stone IPO is a talker with investors

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Rosetta Stone Inc. knows how to speak Wall Street’s language too: Shares of the well-known producer of self-study language-learning programs are soaring today in their market debut.

The Arlington, Va.-based company and its investors sold a total of 6.25 million shares late Wednesday at $18 each. The stock, under the symbol RST, was trading at $25.27 at about 11:45 a.m. PDT on the New York Stock Exchange, up 40% from the IPO price.

Rosetta, just the fourth IPO in the U.S. market this year, may be benefiting from its brand-name recognition -- and from fast growth. Revenue was $209 million last year, up 53% from the previous year, after the company boosted advertising and struck a sales deal with the Barnes & Noble book chain.

Net income jumped to $13.9 million last year, up more than four-fold from $2.6 million in 2007.

‘People are starved for companies that have good internal growth and positive cash flow,’ Francis Gaskins, president of research firm IPO Desktop, noted on Reuters.

And apparently, economic globalization continues to encourage Americans to learn new languages.

Rosetta’s plans to boost overseas sales of its 31 language-learning programs also may be fueling investors’ interest. The company derived 95% of its revenue from the U.S. last year.

Rosetta’s deal got off to a great start in Wednesday’s pricing: The company had expected to price the stock between $15 and $17, but investor demand allowed the underwriters to fetch $18.

That marked the first time an IPO priced above its estimated range since May 2008, according to IPO tracker ipohome.com.

Rosetta’s successful deal is offsetting disappointment in the IPO market earlier this week: An IPO from San Diego-based higher-education firm Bridgepoint Education Inc. got off to a poor start on Tuesday, when the company had to slash the stock’s offering price to $10.50 a share. Bridgepoint had hoped to get as much as $16 a share.

Bridgepoint shares edged up to $11.10 on their first trading day on Wednesday, and have risen further today, to $11.97.

-- Tom Petruno